Many of the retailer's old customers say "I told you so"
of ConsumerAffairs
It came as something of a shock this week when J.C. Penney reported fourth quarter earnings that were a disaster, even by recent J.C. Penney standards. The retailer reported a quarterly loss of $552 million, amounting to $2.51 a share.
Company revenue declined more than 28%. Same-store sales plunged 32%, worse than the previously worst 26.1% in the third quarter. Online sales dropped a stunning 34.4%.
If Wall Street was surprised, ConsumerAffairs readers were not. A year ago, when newly installed CEO Ron Johnson instituted radical changes in marketing and product line-ups, long-time Penneys customers turned to ConsumerAffairs to vent their anger.
Hate it, hate it, hate it
“I hate the new pricing that J.C. Penney recently implemented,” Jeannette wrote in a post at ConsumerAffairs a year ago. “All of my coworkers, family and friends feel the same way. I hope the CEO or whoever that made these changes will change things back to the way they were or at least improve the pricing! I predict that many stores especially in my small community area will be closing if something does not change. Listen to your customers!”
Johnson, who ran Apple's retail business, instituted the changes in February, doing away with sales and coupons and going to what he called a three-tiered pricing system. He also initiated a more youthful, off-beat marketing approach, apparently designed to attract younger, hipper shoppers. In so doing, Penneys has managed to alienate a large portion of its customer base while failing to snag the new customers it covets.
In a blunt article this week, the Wall Street Journal noted the retailer has lost $4.3 billion since Johnson has been at the helm. That article prompted Lisa, of Rochester, N.Y., to rush to the retailer's defense.
At least one happy shopper
“I've had a super easy time finally finding things I love at great prices at Jcp,” Lisa wrote in a ConsumerAffairs post this week. “I saw the Wall Street Journal's article today & wanted to put in a good word for a company that makes shopping fun again.”
But Lisa is definitely in the minority among posters at ConsumerAffairs. More typical over the last year is Diane, of Menomonee Falls , Wis., who this week dropped a big, “I told you so!”
“Attention big stockholders of JC Penney, if their are any left, HEAR US. You allowed this one CEO 'high tech' idiot to destroy what took a century to build. I am (was) a loyal JC Penney customer. I am 54, ex-New Yorker who spent a zillion hours shopping in my life while always hunting for a good sale. GOOD SALE! Which you took away! Why did you allow this to happen?? Why have did you stopped fun sales? You allowed this non-retail person to end fashionable, affordable lines for ladies who are not 15 and a size 0. Those people don't shop in JC Penneys anyway. You lost the middle age shoppers like me.”
If Penney's shareholders and retail gurus want to figure out where Penney's went wrong, they might do well to read through the ConsumerAffairs reviews over the last year. They will not only find angry longtime customers like Diane but customers who are really trying to give the new makeover a try but end up frustrated.
Problems online
“I bought a complete Van Heusen suit, shirt, and shoes for my 10 years old son online at JCPenney.com,” writes Paul, of Freemont, Calif. The jacket to the suit was to be shipped about three weeks after ordering, due to backorder. The rest of the items were shipped within a week.
"After more than three weeks of waiting, I received a cancellation email from JC Penney informing me that the jacket is no longer available. A visit to a local JC Penney shows the same jacket/size is available on the rack for a full price instead of the sale price which was on sale when I placed my order. A call to JCP's customer service seemed like a run-around with no real solution to get it resolved. JCPenney just lost another loyal customer that had been shopping in their stores/on-line for years.”
Kathy, of Sheridan, Wyo., reports a similar experience. She reports ordering some blinds online and receiving a thank you email.
“After a week I went to check on the order but it said I had no order so I ordered the blinds again,” she writes. “My bank account showed a pending transaction for this order but eventually was not charged. I checked my order status and no orders where displayed. After a month I called JCP and they told me nothing was ever placed. I ordered my blinds somewhere else and received them within a week.”
Ironically, during this week's post-results conference call, Johnson raved about a new Oracle IT system that, presumably, should make sure Paul gets his suit and Kathy gets her blinds.
“The problem with JCPenney's IT strategy is that it needs the business to deliver results as well,” tech site ZDNet observed in its report on the conference call.
But if you ask a lot of our readers, J.C. Penney may be running out of time.